Ofsted to crack down on unregistered children’s home providers through criminal investigations and prosecution

The watchdog has also updated its guidance on registering children’s homes, to prioritise providers offering specialist provision in the right places. 

With a growing number of applications, the revised approach aims to make sure that Ofsted’s “finite” regulatory resources are used to process applications that meet local authorities’ most urgent sufficiency needs, it said.

In an article Ofsted noted that issues with workforce capacity, affordability of housing and lack of foster carers has led to children being placed further from home, or in placements not suited to their needs. 

It warned that this problem of sufficiency is contributing to a sharp growth in local authorities’ use of unregistered children’s homes.

Ofsted said: “Unregistered homes put children at risk of being looked after by unvetted and unsuitable people. There are also indications that profiteering and criminality are increasingly a problem in the sector.”

The article explained how Ofsted will “crack down” on unregistered children’s home providers, through criminal investigations and prosecution and by working with partners such as the local authority or the police to take “immediate action” to safeguard children.

According to the guidance, when Ofsted has concerns about the safety of children in an unregistered home, it will take actions that include:  

• beginning a criminal investigation;
• visiting the home as soon as possible;
• gathering evidence and subsequently prosecuting those responsible for operating and/or managing the home.

The watchdog added: “If we do find safeguarding concerns or evidence of other criminal activity, we’ll then immediately bring in partners such as the local authority or the police.

“We have close relationships with safeguarding agencies and police across the country. We always encourage these partner organisations to share information with us that may help our investigations and inspections, especially if this includes any safeguarding concerns. In turn, we also share any information if it means putting the safety of children first.”

The Children’s Wellbeing and Schools Act 2026 became law this April. Through this, the government introduced new powers for Ofsted – allowing it to issue civil penalties against any person ‘carrying on’ (operating and/or managing) an unregistered children’s home.  

Sir Martyn Oliver, His Majesty’s Chief Inspector, said: “Illegal homes are a scourge on our society, placing profit above children’s welfare and safety. It’s absolutely right that we do everything in our power to prevent children from being placed in unsafe and unsuitable accommodation.

“The research published today highlights that we need the right homes in the right places, not more homes in the wrong places. Changing our approach to focus on sufficiency, as well as rooting out criminality, will ensure we’re playing our part in tackling this issue.”

Responding to Ofsted’s plan to tackle unregistered children’s homes, Cllr Gerald Vernon-Jackson, Chair of the Local Government Association’s Children, Young People and Families Committee, said: “Ensuring children get the best care and support is a priority for councils. While no council wants to place a child in an unregistered setting, in many cases they have no choice due to the lack of available provision that meets children’s needs.

“The huge cost of care placements also means there is less money for councils to spend on the vital, early help and support for children and families, that can prevent crisis later.”

Cllr Vernon-Jackson added: “The sector and government must work together to address this situation and ensure we have sufficient registered homes for children. This will require everyone – including central and local government, Ofsted, the NHS and providers to act together and tackle the systemic problems in the children’s homes market.

“We support the measures in the Children’s Wellbeing and Schools Bill to increase oversight of the largest providers of children’s homes, as well as the introduction of a profit cap to tackle excessive profiteering in the market.

Lottie Winson